Many companies within the automotive industry have provided pension lump sum payment programs that impact certain current salaried retirees or former employees. General Motors, Ford Motor Company, Fiat Chrysler Automobiles, and Visteon, to name a few have offered these programs. 

In some cases these companies are also providing a new option for current salaried employees to receive a lump sum pension benefit upon retirement. This is now a trend among a number of companies outside the automotive industry as well. NCR, Sears, The New York Times, Equifax, TRW, Lockheed Martin, J.C. Penney, and Archer Daniels Midland are among several companies that have come forward with a pension lump sum offer for certain retirees and former employees.

By taking advantage of the lump sum pension payment option, retirees and former employees may reduce many potential pension risks including longevity risk due to inflation, tax risk, and mortality risk. Most importantly for current employees, at retirement it will completely eliminate "PBGC risk" – the risk that monthly pension payments are someday reduced by the Pension Benefit Guaranty Corporation, as Delphi retirees suffered.

MCM’s Pension Payment AnalyzerTM can help you answer these questions:

  • Which pension benefit payment option is best for my personal situation?
  • What is the present lump sum value of my pension?
  • What are my monthly cash flow needs in retirement?
  • How are monthly pension payments impacted by inflation?
  • What are the tax implications of a lump sum versus monthly pension payments?
  • Do I want the ability to take distributions from my pension benefit at my discretion?
  • How does the life expectancy of my spouse and I impact this decision?
  • How can each pension payment option impact my estate planning and financial legacy?
  • How would my overall retirement income plan change with a lump sum pension payment?
  • How can a lump sum pension payment improve flexibility in my income and tax planning?
  • What is the best way to optimize my overall retirement savings and pension benefit?
  • What changes should I consider in my Ford SSIP, IRA, and Social Security distributions?
  • How would a PBGC takeover of Ford’s pension plan impact my pension benefit?
  • How much would my monthly pension payment be reduced in a PBGC takeover?

Mainstay has counseled thousands of auto workers on retirement saving, planning, and investing. We can provide a comprehensive Retirement Income Analysis, help you evaluate "what-if" scenarios, and assist you in making well-informed decisions concerning your pension payment options.

Call Mainstay Capital Management toll-free at 1-866-444-6246 to discuss your personal situation.

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